Pennamco, Inc. (“Pennamco”) has instituted a scire facias sur mortgage foreclosure on a construction loan mortgage. During the pendency of motions to dismiss and for entry of judgment, petitioners, JR & S Associates (“JR & S”) and John Julian Construction Co. (“Julian”), filed a joint motion to intervene under Superior Court Civil Rule 24(a)(2). JR & S, a subordinate mortgagee, alleges that violations by Pennamco of certain commitments in related mortgage documents invalidated a subordination agreement, making its lien prior to Pen-namco’s; Julian, a contractor, also alleges *728violations of commitments in related documents which obligated Pennamco to make payments to Julian. After defendant Nar-do Management, Inc. failed to file an Affidavit of Defense, Pennamco obtained judgment and directed the issuance of a Writ of Levari Facias for the purpose of executing on its judgment. Petitioners moved to stay execution and sale until their motion to intervene was resolved. By stipulation, the motion to intervene and the motion to stay have been consolidated.
The Court has concluded that the petition of JR & S to intervene should be granted but as to Julian, it should be denied.
In deciding whether to permit intervention, all nonconclusory allegations supporting a motion to intervene are taken as true, absent sham or frivolity. Central States, Etc. v. Old Sec. Life Ins., 7th Cir., 600 F.2d 671 (1979); See also 7A Wright & Miller, Federal Practice and Procedures: Civil § 1914 at 570 (1972). The Court, in determining the intervention issues, does not undertake to decide the ultimate validity of petitioners’ alleged rights. Weinberger v. Goldstein, N.J.Ch., 99 N.J.Eq. 1, 132 A. 659 (1926), aff’d, 101 N.J.Eq. 310, 137 A. 920 (1927). Only the following issues are addressed: First, may a proposed claim arising out of a mortgage transaction be properly asserted in a mortgage foreclosure proceeding. Second, do each of the petitioners meet the intervention standards set forth in Rule 24(a)(2) which provides:
“Upon timely application anyone shall be permitted to intervene in an action: .... (2) when an applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.”
JR & S
Petitioner JR & S bases its motion to intervene on two separate allegations. First, since the proceedings of the Pennam-co loan were not used to reduce the JR & S mortgage as agreed in the Subordination Agreement, the agreement itself is not binding. Second, the Subordination Agreement is also invalid because Pennamco failed to adequately supervise and monitor its loan advances in accordance with provisions outlined in the Construction Loan Agreement. There are four documents, all executed on July 27, 1979, pertinent here: 1) Purchase Money Mortgage, 2) Construction Mortgage, (3) Subordination Agreement, and 3) Construction Loan Agreement.
The question of whether a claim or counterclaim of this nature may be asserted in a mortgage foreclosure proceeding was discussed in First Federal Sav. & L. Ass’n of Phila. v. Damnco Corp., Del.Super., 310 A.2d 880 (1973). In that case, the defendant, in a sci. fa. sur mortgage, asserted as a counterclaim that “plaintiff has failed to pay construction mortgage money owed defendant and agreed upon by mortgage documents, written and oral understandings.” The Court made the assumption that a counterclaim of this type would be allowable in a sci. fa. sur mortgage action.1 To support this assumption, the Court cited two cases, Frantz v. Templeman Oil Corporation, Del.Super., 134 A. 47 (1926)2 and Gordy v. Preform Building Components, *729Inc., Del.Super., 310 A.2d 893 (1973).3 In both of these cases, the Court refused to permit a counterclaim which arose from a different transaction. In Gordy v. Preform Building Components, Inc., supra, the Court reasoned that to do so would infuse person-am litigation based on a foreign transaction, into an action which was essentially in rem.4 By negative implication, a counterclaim based upon the same transaction which maintains the in rem character is allowable.
Clearly, JR & S’ claim, which only affects lien 'priority status, maintains the in rem character of the proceedings. In addition, JR & S’ interest is intimately related to the mortgage transaction itself, which is the subject matter of this action.5 Since a counterclaim of this nature is assumed allowable, the argument favoring intervention is even more persuasive.
Pennamco also relies upon unrecorded releases executed by JR & S, but not recorded. The Court cannot speculate concerning possible future events. Indeed, it is somewhat mysterious why Pennamco has chosen not to record these releases. In addition, the substance of JR & S’ claim attacks the very validity of these releases.
Examining the intervention standards set forth in Rule 24(a)(2), it is apparent that they have been met. An “interest relating to the property or transaction which is the subject matter of the action” has already been established. In addition, Pennamco’s present position clearly demonstrates that JR & S’ interests are not adequately represented and that disposition of the action may, as a practical matter, impair their ability to protect that interest.
JR & S’ claim, having satisfied the standards set forth in Rule 24(a)(2), and being sufficiently related to the mortgage transaction, may be asserted in this foreclosure proceeding. Intervention of right is justified.
JULIAN
Petitioner Julian bases its motion to intervene on a provision in the Construction Loan Agreement, which provides that Pen-namco directly pay Julian for certain land improvements. Julian alleges that Pen-namco’s failure to strictly comply with this provision justifies intervention of right. The issue is whether or not this obligation is part of the mortgage transaction. After examining the origin and nature of this *730obligation, the Court concludes that it is not.
Julian’s claim originated in a land sale agreement between Nardo Management, Inc. (purchaser) and JR & S. The subject matter of this agreement was Nardo Management, Inc.’s payment of the purchase price; neither Julian nor Pennamco were parties. The agreement listed three separate payment obligations in section 2. The second concerned Julian. It required Nardo Management, Inc. to pay $75,000.00 into escrow to finance certain land improvements to be performed by Julian. It was contemplated that Pennamco would act as an escrow agent. Pennamco became the escrow agent of this fund after executing a Construction Loan Agreement with Nardo Management, Inc. and JR & S. The relevant provision is entitled, Completion of Land Improvements.6
Julian’s specific claim is that Pennamco, as escrow agent, failed to properly release funds. This claim is purely contractual; it bears no relation to the mortgage transaction. While it is true that both Julian and JR & S base their claims on the Construction Loan Agreement, the Court readily distinguishes Julian’s contractual claim from JR & S’ priority status claim. The Court concludes that Julian’s interest is not sufficiently related to the mortgage transaction so as to make it a necessary party. Its claim is more properly the subject of a separate action.
MOTION TO STAY SALE OR EXECUTION
At this stage, it is in the interests of both JR & S and Pennamco to maximize any amount realized from a foreclosure sale. Since this may depend upon a timely sale, the stay of sale or execution is denied, conditioned upon the payment into Court of all proceeds realized. These proceeds will be held in escrow pending a disposition of contentions on the merits.
For the reasons herein stated, the Court concludes that the joint motion to intervene should be granted as to JR & S and denied as to Julian. The motion to stay sale or execution is denied, subject to the escrow of foreclosure funds as indicated herein.
IT IS SO ORDERED.'